Financial Drivers of ASC Success

Proactively managed ASCs continue to look for ways to remain competitive, financially, operationally and strategically. The ASC industry is not only facing a maturation of its industry, but is also dealing with a sluggish economy which continues to impact volumes. Therefore volume and revenue growth are challenging in this environment. In addition, physicians are retiring at a faster rate than new physicians are entering the market. This trend is expected to continue as baby boomers reach retirement age. Furthermore, uncertainty surrounding healthcare reform’s long-term impact on ASCs still exists. There is no question that managed care and Medicare will continue to present reimbursement pressure and therefore net revenue per case (NRPC) will likely continue to decline. Given the maturation of the industry, a sluggish economy, physician shortage and pressure from payors, successful ASCs will be forced to identify ways to capture the right volume, stay ahead of the cost curve and proactively address legislative headwinds. There are a few strategies an ASC should be actively considering in order to drive financial success: increase revenue as it relates to price and volume, and decrease fixed and variable expenses.

REVENUE

There are several publicly available studies which will allow ASC management to compare their operations to peers. Using the following publications, one can benchmark an ASC’s NRPC, case volume and payor mix by specialty to similar ASCs or the industry in general. The VMG Health “2011 Intellimarker ASC Financial & Operational Benchmarking Study,” the Ambulatory Surgery Center Association “Financial Benchmarking Survey” and the MGMA “2009 ASC Financial Performance Survey” are all publicly available resources which aggregate NRPC, case volume and payor mix data, and some present this data by specialty across geographical region, facility size and by operating room. Please note, as with any data source, the user must take care to ensure
benchmarks are comparable, current and from ASCs similar to the subject ASC. No two ASCs are identical, so take care to analyze the benchmarking data across different sources.